First things first. You’ve probably heard that the new bill has a tax credit on your paycheck. It’s called the Make Work Pay credit and it’s worth 6.25% of any earned income in 2009. The max is $400 for singles making less than $75,000 and $800 for families with $150,000 or less combined income. It will be distributed through payroll for the last 26 weeks of the year. So it equates to about $15 a week for single filers who qualify for the $400. This will not come through your tax refund like the last stimulus. It also provides a one-time $250 payment for those who don’t work and retirees.

The next big tax credit in the new bill is the $8,000New Homebuyer credit. This is different from the $7,500 new homebuyer “credit” that was supposed to be paid back over 15 years. The new $8,000 new homebuyer credit is a real tax credit, not an interest-free loan. It actually reduces your tax liability. Even if your tax bill is less than $8,000, you’ll get the difference back. If you overpaid your taxes throughout the year, you’ll get your regular refund plus the $8,000 extra! Sounds like a good deal to me!

So how do I qualify? You have to purchase a home between January 1, 2009 and November 30, 2009 and be a first-time homebuyer. To qualify to be a first-time homebuyer, you must not have owned a primary residence home within the last 3 years. It’s okay to have owned investment property or a vacation home as long as you didn’t live in it for most of the year. Also, you need to stay in the new home for 3 years to keep the tax credit. Income restrictions are the same as the Make Work Pay credit; $75,000 for singles and $150,000 for married filing jointly.

The next part of the bill that may affect you is the Car Buyer tax deduction. This is a tax deduction not a tax credit (which is more valuable). A tax deduction only reduces your income so it’s only worth the amount times your tax rate. The deduction allows you to deduct the state and local sales tax for any new car, truck, R.V., or motorcycle that was charged on the purchase during 2009. This won’t help you if your state doesn’t have a sales tax and it’s an above-the-line deduction so you don’t have to itemize to get the deduction. Income restrictions are $125,000 for single filers and $250,000 for joint filers.

Next up is the American Opportunity Tax Credit for 2009 and 2010. This tax credit increases the existing Hope Scholarship tax credit from $1,800 to $2,500. Income restrictions are $80,000 ($160,000 for married filing jointly). Partial credits are available to those making up to $90,000 ($180,000 filing jointly). Also related to this is the increase of the Pell Grant to $5,350 in 2009 and $5,550 in 2010.

For those of you who are unemployed, there’s also help for you in the bill. Cobra coverage (which allows the unemployed to keep health insurance from a previous employer) will be subsidized up to 65% of Cobra premiums for up to 9 months if you laid off between September 1, 2008 and December 31, 2009.

Unemployment benefits are also going to be increased by an additional 20 weeks (and 13 weeks more in certain states where unemployment is higher than 6%) and $25 additional weekly. Also, the first $2,400 is tax exempt in 2009 on your federal income taxes.

There are other portions of the stimulus bill like increased food stamp payments and deductions for energy efficient appliances and others. I may not agree with some of Obama’s policies but I’ll take free money any day! Bring it on Prez!

February 12, 2009

Happy birthday, Abe! Yes, today is Abraham Lincoln’s birthday. And what an inspiration President Lincoln is. He is one of my favorite historical figures and also one of my favorite presidents.

Abraham Lincoln’s life should be an inspiration to anyone. Did you know that he lost his job in 1832 and was also defeated for state legislature in the same year. In 1833 he failed in business. In 1835 his sweetheart died. He had a nervous breakdown in 1836. In 1838 he was defeated for Speaker. He was defeated for nomination for Congress in 1843. He lost renomination in 1848. In 1849 he was rejected for land officer. In 1854 he was defeated for U.S. Senate. Abe was defeated for nomination for Vice President in 1856. He was again defeated for U.S. Senate in 1858.

Wow! That’s a whole lot of failures. I don’t know if I would have run for public office again after losing that many times! But guess what? He did. And Abraham Lincoln became the 16th President of the United States in 1860. Not only that, he changed history as President and is regarded as one of the greatest Presidents of all time.

“Common looking people are the best in the world: that is the reason the Lord makes so many of them.” Abraham Lincoln

“The probability that we may fall in the struggle ought not to deter us from the support of a cause we believe to be just; it shall not deter me.” Abraham Lincoln

I love this quote from President Kennedy. The essence of the quote is about being proactive instead of reactive. We cannot live our lives being thrown around by life’s circumstances and situations. We need to be proactive and take control of our lives. We feel out of control when we are always reacting to life and its problems. Take control of your life and your money by being proactive. It can be done with one decision. Some help from God doesn’t hurt either!

February 9, 2009

30 By faith the walls of Jericho fell down after they were encircled for seven days.

Hebrews 11:30 (NKJV)

The book of Hebrews is all about faith. Faith can bring down the walls in your life. Just look at what faith did for the Israelites when the walls of Jericho fell down and they were able to defeat the enemy! You can’t please God without faith and with faith you can do some pretty incredible things! Believe God today to bring down the walls that are holding you back.

It took faith for the warriors of Israel to destroy the walled city of Jericho by such unconventional means. Yet this act of faith brought the results they desired; God gave them victory over their enemies (Josh. 6).

February 5, 2009

Dollar Savings Direct dropped their savings rate to 3.20% (down from 3.5% and 4.0% recently). ING Direct is now at 2.2% (from 2.4%). ING Direct is probably my favorite online savings account because they don’t drop rates drastically like their competitors and they raise rates faster when general interest rates are rising. Get a $25 bonus for opening an account! Just email me. HSBC Direct is at 2.45%.

February 4, 2009

Full disclosure: I was given a complimentary copy of the book by the author. When I was contacted to review the book, I was immediately intrigued by the title. How I Managed $20,000,000,000.00 by Age 32 was an interesting and easy read. The main book is only about 154 pages and can be read in one sitting. The appendix takes up the rest of the 201 pages.

Mr. Slome definitely has had success at an early age. And his book shows that success doesn’t just come. It comes with hard work. He worked his way up to manage a $20 billion fund at American Century Investments.

Mr. Slome starts off the book by going over some life influences that shaped his thinking. Then he talks about the path that took him to where he is now including some mistakes that he made along the way. Other chapters talk about efficient market theory and his investment philosophy. He even has a chapter devoted to hedge funds along with a good explanation of them. He also talks about a typical day as the top portfolio manager for one of the largest mutual funds in the country.

The real nuggets in this book are the chapters about investment strategies, choosing an investment manager, and what to do with your own portfolio. Even his investment philosophy is something you can apply to your own investments.

If you’ve ever wondered what it’s like to run a large mutual fund or to get inside the head of a successful mutual fund manager, then this is the book to get! If you’re in the stage of your life where you’re focused on investing (and already out of debt), this book has some solid investment advice, as well as some good advice on choosing a financial advisor. If you don’t fit into those categories, this is not the book for you. If you are, I can wholeheartedly recommend this book! God bless!

Also, check out the rest of the virtual blog tour. Comment here for a chance to win a free copy of the book yourself (courtesy of the virtual blog tour)! Also, the author may drop by and answer any questions you might have!